In a victory of hope over reason, shares in GAP (NYSE: GPS) are up 6% to $16.70 in pre-market trading. The
advance is odd because GAP's July same-store sales were off by 7%.
With the exception of its Banana Republic unit, which saw an increase of 4% in same-store sales compared to a drop of 1% in the same month last year, GAP had another rough month in the U.S. GAP North American dropped 6% on top of another 6% last year. Old Navy fell 9% compared to 5% in the same month in 2006.
GAP did announce that for the second quarter of fiscal 2007, the company expects diluted earnings per share on a GAAP basis between 17 and 18 cents.
Thomson Financial had forecast GAP same-store sales to be down 4.9%. But, the guidance must have fired up Wall Street.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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